Re:Software Is Eating the Job Market
by dragonwriter on Tuesday June 09, 2015 @02:45PM
(#9687780)
> Raise my taxes enough (only to "redistribute" to those opting to not work) and I'll switch to untaxable yet satisfying "off the grid" living.
That's actually not a harm, and its exactly why you aren't tearing out the incentive for productive activity; when you devote more of your time to that because you've hit a high-enough marginal tax rate that the marginal benefit post-tax from additional gain through taxable activity is not sufficient to meet your marginal opportunity cost from that activity, simple supply and demand increases the incentive for others for whom that balance works out differently -- perhaps because they are lower on the progressive tax scale so that the marginal realized net monetary return is greater, or perhaps because they are at a similar place to where you are but weigh the costs differently -- to engage in the activity you are forgoing. In fact, a net upward (on the wealth/income) scale shift in tax burden increases the incentive for productive activity at the lower end of the scale.
That's actually not a harm, and its exactly why you aren't tearing out the incentive for productive activity; when you devote more of your time to that because you've hit a high-enough marginal tax rate that the marginal benefit post-tax from additional gain through taxable activity is not sufficient to meet your marginal opportunity cost from that activity, simple supply and demand increases the incentive for others for whom that balance works out differently -- perhaps because they are lower on the progressive tax scale so that the marginal realized net monetary return is greater, or perhaps because they are at a similar place to where you are but weigh the costs differently -- to engage in the activity you are forgoing. In fact, a net upward (on the wealth/income) scale shift in tax burden increases the incentive for productive activity at the lower end of the scale.